The Chinese Finance Association held 23rd Annual Conference in New York

The TCFA Annual Conference took place on Nov 5th at the Marriot hotel in Times Square. Over the past two decades, this has developed into a premium event that gathers US and China financial professionals. It always features high-profile speakers, interactive panel discussions, and has an international attendance of over 700 which keeps growing. Participants engage in lively dialogues about the global economy, market trends, business opportunities, and issues facing the industry.

"TCFA's annual conferences have always been centered around financial and economic issues most relevant to the U.S. and China. " President-elect Dr. Li Liu emphasized in his opening remarks.

This year’s conference agenda was packed full of top figures from diverse fields: business leaders such as Founding Partner and CEO of Atlas Merchant Capital, Former CEO of Barclays Mr. Bob Diamond, government officials such as Chair of US Federal Deposit Insurance Corporation, Ms. Sheila Bair and Executive Vice President of China Investment Corporation, Dr. Qin Bin, and academic experts such as Prof. Shang-Jin Wei from Columbia University.

The conference, titled "US and China as Leaders in the Multipolar World: Risks and Opportunities in Financial Markets", covered two profound global trends. One is the geopolitical shift that transfers the unipolar world led by the US into one with an increasing number of multipolar leaders. The other one is the rapid technological progress that revolutionizes all aspects of people’s life, from personal finance to healthcare.

The US public policy debate traced to its root in the 2008 Global Financial Crisis. Ms. Sheila Bair highlighted the short-sighted nature of US policy conduct had been particularly vulnerable to changes in public opinion, lobbying activities, and even populist movements. She recalled vividly the loud cry for financial regulation on the Capitol Hill immediately after the crisis had already changed its tone during the first twelve months of the new administration. Ms. Bair contrasted such policy stance with the Chinese President Xi Jinping’s recent call on more comprehensive financial regulation in China, and she argued that successful policy conduct should be continuous and targeting for long-term goals.

The second keynote speaker Mr. Bob Diamond strongly agreed on the significance of regulation in preventing the next systematic crisis. However, he highlighted the need for business to adapt to the cost of regulation, especially for universal global banks in Europe and the US. Meanwhile, he showed regionally-focused institutions tend to deliver higher returns on equity, especially in developing countries and pockets of under-valued European markets.

The evolution of regulatory and political environment has also associated economic challenges and opportunities. And these were debated by the macroeconomics panel made of Chief Economists from leading US institutions. All panelists, Ms. Beth Ann Bovino from S&P, Mr. Greg Daco from Oxfords Economics, and Mr. John Silvia from Wells Fargo, agreed on the secular challenges faced by the largest economies in the world. These include depressed rate of GDP growth, sluggish wage appreciation, negative demographic trends, and the rise of protectionism.

Differences arose when it came to the efficacy of monetary and fiscal policy in the year ahead. Mr. Silvia disagreed with Ms. Bovino’s on whether the Federal Reserve would continue its steady policy normalization under the new leadership, Jerome Powell. Mr Silvia articulated the possibility of overtightening, a downside risk to the economy. But Mr. Daco suggested that the fiscal stimulus might more than offset. If the latest proposal for US tax reform was fully realized, it could boost US GDP growth rate by as much as one percentage point in 2018, according to Mr. Daco.

The policy uncertainties and troublesome secular development also raised concerns among speakers at the global investment panel. Mr. Shakil Riaz, Managing Director from Lighthouse Partners listed a few possible responses to the challenging market environment: harvesting illiquidity premium, diversifying into niche markets, and identifying the most effective layer of the capital structure. Mr. Tony Charles, Managing Direction from Morgan Stanley Investment Management, has highlighted the attractiveness in the US entry-level residential properties and European properties markets. Mr. Ryan Tolkins, CIO of Shonfeld Group focused on the rising importance of quantitative investment strategies over the long-term. Mr. Peter Zangari, Global Head of Research from MSCI further explored cyclical and secular drivers for active equity investing, and he highlighted the impressive rise of factor in determining investment and facilitating risk management.

Similar to the domestically oriented policy initiatives by the US, the Chinese authority is also determined to lift the people’s living standards. Executive Vice President of CIC, Dr. Bin Qi, demonstrated the potential for China to achieve this goal and highlighted its ongoing reform-driven economic transition. Moreover, he suggested domestic progress had allowed China to initiate international cooperation efforts such as Belt-and-Road, and work with the US to revive its manufacturing sectors in states such as Illinois and Wisconsin. Dr. Qi showed optimism in the US-China cooperation. Ahead of President Trump’s recent Asian trip, officials from both sides held a National Government Summit that opens up possibilities at various levels. As China’s sovereign fund, CIC has been leading these initiatives at multiple fronts. The “CIC Forum 2017” taking place later this year is one of the great example.

In an attempt to demystify the controversial trade practice between the two countries, Prof. Shang-Jin Wei, N. T. Wang Chair Professor at Columbia University and former Chief Economist of Asia Development Bank investigated the imbalances between the US-China merchandised trade. He argued the causes for such abnormities had been multilateral factors rather than unilateral. And it would be a mistake to completely attribute the job loss in the US manufacturing economy to China. On the contrary, US gain more from every dollar of goods sold to China than vice versa, due to US’ higher position in the value-added chain. Given the complex and intertwined global supply chain, Prof. Wei argued that deepening cooperation is a much less destructive way to address imbalances than hostile trade policies.

Even in the unlikely event of severe trade disruption, an increasingly robust Chinese consumer sector should withstand more external vulnerabilities. The recent boom in FinTech industry, driven by personal financial services, demonstrates such a potential.

The afternoon Keynote speech featured the Founder and CEO from HC Financial Services Group Mr. Hongtao Qin. He reviewed the path for the company to become one of the largest and most comprehensive provider for personal finance services. And he reflected the steady rise in consumers’ purchasing power and persistent pursuit for better life had been ultimately behind the industry’s multi-year boom. Most recently, HC Financial has expanded into new areas such as Belt-and-Road initiatives, inclusive finance projects, and investment opportunities in south east Asia, demonstrating the dynamism of the Chinese economy at large. The following FinTech investment panel further uncovered the true scale of opportunities when robust consumer demand meets cutting edge technology. Leaders from tech accelerator, venture capitalist, and cross boarder investment conduits discussed a variety of new trends in their fields.

Healthcare is another industry that can rise against the secular headwinds on both sides of the Pacific. The healthcare panel invited executives from leading biopharmaceutical companies and prominent market participants to assess the potential in this industry. Dr. Lan Huang, co-Founder and CEO of BeyondSpring and Dr. Howard Liang, CFO and Chief Strategy Officer of BeiGene, highlighted the unprecedented pace of scientific innovation among Chinese biopharma companies, and this sector’s rapid expansion. Meanwhile, they emphasized the crucial role of prudent quality control in industrializing new technologies, in order to maintain the quality and sustainability of growth. This sector’s dynamism had been further boosted by the comprehensive reform in China’s health policy, which aims to improve the public’s long-term welfare.

Market participants, Dr. Ting Jia, Managing Director from Hill House, Dr. Katherine Xu, co-Head Biopharma Research at William Blair, and Ms. Christine Zhao, Partner of Yuanming Capital, and US industrial expert, Mr. Ben Zimmer, Chief of RoivantNext, all showed confidence in the enormous commercial value associated with such developments. They also stressed the importance of investing in the right people, who can innovate and execute.

TCFA’s endeavor to support its members extends beyond being a platform for discussion and networking. Concurrent to the conference main agenda, it held a recruiting event featuring many prominent Chinese financial institutions.

The conference concluded with the official announcement that Mr Li Liu as TCFA's President for 2017-2018. TCFA members also elected Mr Bo Liu as the President-Elect, and six new Board members.

Founded in 1994 TCFA is a nonprofit organization, which has flourished into a global organization with over 6,000 members. Its active chapters have been established in Boston, Washington DC, Chicago, San Francisco, Los Angeles, Charlotte, Toronto, London, Tokyo, Singapore, Beijing, Shanghai, and Shenzhen.